State insurance exchanges, one of the key planks of the reform law, are supposed to launch in October. Prepare for disaster.

In testimony before Congress, health insurance czar Gary Cohen has peddled optimism about the prospects for the health insurance marketplaces that will open for business in October. Every state will have an exchange, he says, and the federal government will be ready to run them in the 33 that have opted not to do so themselves.

But in comments to a conference of insurance executives last month, Cohen, the director of the Center for Consumer Information and Insurance Oversight, sounded less cheery. “It’s only prudent to not assume everything is going to work perfectly on day one,” he said, according to a CQ Roll Call report, explaining that his office has begun contingency planning for glitches. His colleague Henry Chao, who oversees exchange technology, was even more bearish. “The time for debating about the size of text on the screen, or the color, or is it a world-class user experience—that’s what we used to talk about two years ago,” he said, according to the report. Now the philosophy is: “Let’s just make sure it’s not a Third World experience.”

The exchanges are a key element of President Obama’s health care reform, designed to be the central portal where people without insurance can learn about the health plans on the market and the federal assistance available to help buy them. Enthusiasts have described them as an Amazon.com for health insurance, where only a few clicks separate an applicant from enrollment in Medicaid or a private plan. But as 2014 approaches, it is increasingly clear that this reality is not right around the corner. “Is it going to be what everyone dreamed?” asks Cindy Gillespie, senior managing director at McKenna Long and Aldridge, who helped Massachusetts develop its health care system and is now working with states and health plans. “Is it going to look like that, and is it going to be this seamless eligibility? No way.”

Already, the Health and Human Services Department has signaled the federal exchanges will not have all the bells and whistles once promised. In March, HHS said the small-business portals will not be able to allow individual employees to choose their own plans in the first year, as the law requires. Small-business employees will still be able to buy there, but only the single plan selected by their employers. That’s just one of a few “shortcuts” that analysts say theadministration will take in the first year for the sake of functionality. “They’ve openly acknowledged that some of that is not going to be ready,” says Caroline Pearson, a vice president at the consultancy Avalere Health, who is watching the exchanges’ progress.

The administration has also indicated that, in some states, information about which people are eligible to buy through the exchange (and with how much government help) won’t be instantly available. To answer that question, the exchanges must consult a yet-to-be-completed data hub that merges income information from the IRS, disability information from the Social Security Administration, and citizenship information from the Homeland Security Department, along with state systems that will determine whether people with certain conditions or very low incomes qualify for Medicaid coverage. States are updating their systems, but few have the sophisticated computer programs that can sort out those questions in real time or communicate the answers to the federal government. It seems clear that some shoppers will face long delays or fill out federal applications, only to be directed to apply again at a state website or office. In some cases, the seamless digital experience may be replaced with paper applications.

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A few states have chosen to run their own exchanges and are further along than the federal government (most of these will have the small-business choice system working, for example). But others may not make it across the finish line. In New Mexico, HHS has conditionally approved a state exchange, but state officials have still not signed a contract with an IT vendor to build the system. Other states that contracted earlier have been frustrated with the finished software or struggled with questions about how to regulate insurance products. States’ failure is one of the contingencies that Cohen said his staff is preparing to address. “It’s going to be, in a word, messy,” says Cheryl Smith, a director at Leavitt Partners, who helped set up Utah’s small-business exchange.

But 2014’s mess could be significantly cleaned up by 2015. Jonathan Gruber, an MIT economist who worked on both the Massachusetts and federal health care reform laws, says people need to be patient as the exchange system works through an inevitable trial-and-error phase. “This is going to take a year, at least,” he says. “The main message, I think, is optimistic. Overall it’s going to work, and over time it’s going to work out, but in the near term, there’s going to be some glitches.”